Wescale is the broader “procurement umbrella” and new open business integration platform of WPS Management, a provider that traces its roots to 1997 with the creation of Wallmedien AG, one of the first e-procurement solutions for the SAP environment in Europe. We’re sorry if this sounds confusing (it is). But what matters is that since its founding, Wallmedien AG has managed to grow its core business in e-procurement while also adding additional capabilities through its affiliated businesses and product lines, including WPS4/Procure, Meplato and recently Wescale.

Wescale is the platform through which all WPS Management solutions are integrated. WPS Management (branded as Wescale) has participated in the Spend Matters E-Procurement SolutionMap, competing with specialists such as Vroozi, BuyerQuest, OpusCapita (jCatalog) and others with similar platforms like Basware, Tradeshift and Determine (now Corcentric).

This three-part Spend Matters PRO Vendor Snapshot uses facts and expert analysis from Wescale’s participation in the 2018 SolutionMap to help procurement organizations make informed decisions about the broader umbrella of capabilities this provider offers. An update will be published this summer, based on Wescale’s latest 2019 capabilities.

Part 1 of our analysis provides a company background and detailed solution overview, as well as suggestions for when organizations should consider the Wescale platform. The remainder of this multipart research brief covers product strengths and weaknesses, competitor and SWOT analyses, user selection guides, and insider evaluation and selection considerations.

The question of how to manage tail spend is as much a philosophical question as a technical one. There are issues around the thresholds that define tail spend, challenges around rogue spend that creates the long tail and the ultimate decision about who should be responsible for taming the tail.

But for most procurement organizations, the tail spend discussion is left unexplored.

Instead, the status quo way of managing tail spend often reigns. It’s rarely effective, so you’re left with the problems: wasted time by procurement and non-procurement staff, long lists of unknown or untrusted vendors, no clean data or visibility into savings left on the table.

Challenging this status quo is what Fairmarkit, a provider of tail spend management software out of Boston, seeks to do with its RFQ and analytics solutions. But where does Fairmarkit fit compared with other sourcing and tail spend management providers in the procurement technology market, and what are its relative strengths and weaknesses compared with direct and indirect competitors?

This Spend Matters PRO Vendor Introduction offers a candid take on Fairmarkit and its capabilities. Part 1 of this brief provided an overview of Fairmarkit’s offering and a detailed solution tour. Part 2 includes a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a competitive breakdown of other providers that a procurement organization might consider while evaluating Fairmarkit.

Tail spend is a growing area of concern for procurement. Given the granular, dispersed and opaque nature of such spend, many organizations find the task of taming the tail daunting.

Purpose-built tools have long existed that adequately address strategic sourcing activities (e-sourcing) and route internal users to pre-approved catalog items (e-procurement), yet technology to support the 20% of spend that is not actively managed by procurement has comparatively lagged.

Instead, the answer for most procurement groups has been to either attack tail spend with a patchwork of variably effective methods (p-cards, marketplaces) or outsource the problem entirely, like to a BPO firm.

Yet neither of these methods is particularly attractive. With the patchwork approach, issues around risk and control are poorly addressed, and while routing purchases under a low threshold (e.g., $500) into a marketplace can satisfy the typical spot buy, this hardly represent a strategy around optimizing tail spend.

BPOs offer expertise and a “set-it-and-forget-it” mentality, but organizations often find that the process efficiencies that they had hoped to gain don’t materialize as promised.

Finding a third way between the patchwork and complete outsourcing is at the heart of how Fairmarkit, an upstart vendor out of Boston, is trying to solve the tail spend management problem.

By using machine learning to analyze purchasing patterns and vendor fit, Fairmarkit automates the RFQ process for variable purchases that fall in the roughly $500 to $250,000 range. In the process, it wants to challenge the status quo for how businesses think about tail spend, enabling procurement groups to automate bidding and analysis on low-value purchases so they can assign team members solely to strategic events. And Fairmarkit already has had success doing so, claiming an average of 6% to 12% cost savings with clients as varied as the Massachusetts Bay Transportation Authority (MBTA), Univision and Yeti.

This Spend Matters PRO Vendor Introduction offers a candid take on Fairmarkit and its capabilities. It includes an overview of Fairmarkit’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a selection requirements checklist for companies that might consider the provider.

In the first article of this Spend Matters PRO series, we recounted the story of AI in optimization today, or, more accurately, the lack of artificial intelligence in optimization today. While AI in its most base form of "assisted intelligence" is readily available in many modern procurement and sourcing platforms, as evidenced in our previous two series on AI in Sourcing and Procurement, it has not yet creeped into optimization.

But that doesn't mean that AI will not creep into sourcing optimization tomorrow. While we may not see AI creep into any of the current platforms on the market (for different reasons for each vendor), that certainly doesn't mean that the next vendor to bring an optimization solution to the market won't learn from the oversights of their predecessors. In fact, in looking to get an edge over the existing, established platforms, it will assuredly be the case that tomorrow's optimization platforms will not only have a greater focus on UX and automation, but on AI.

Now, as per our last article, AI won't be embedded in the optimization engine — because that has to be powered by mathematically algorithms that have been rigorously proven to be sound (no errors, ever) and complete (will examine every solution and find the best one guaranteed) and given that most "AI" today (in the assisted and augmented intelligence category, because there is no true AI) runs on statistical or probabilistic machine learning algorithms, they just don't make the cut. (Although they can be paired with sound and complete MILP algorithms based on simplex or interior point to find faster starting solutions to difficult problems.)

Rogue contracting of freelance resources can, with the right supporting technologies, be turned from an operational risk to an attractive business opportunity — to drive savings, reduce compliance risks and provide improved visibility into and intelligent insights about this segment of the workforce to senior leadership. In this article, we examine the drivers and resulting issues of the increasing presence of rogue spend within contingent workforce management programs, and then we explore the opportunities and solutions that businesses can use to address this challenge.

Industry insiders might argue that the growth of Avetta, Browz, ISNetworld and other industry supplier compliance and credentialing solutions like VendorMate (now part of GHX), GRMS and Hellios should never have been allowed to reach escape velocity owing to the first mover advantage that Achilles had on this market overall. But playing armchair supplier credentialing, pre-validation and certification vendor quarterback is nowhere near as useful an exercise as explaining the history of this market and how it became the largest procurement solutions sector that most buyers know little if anything about — yet is of critical strategic (and growing) importance.

So join us as we provide a history lesson about how this market came about and the value levers it created for buyers and suppliers. This investigation includes exploring how the sector in which Avetta competes can serve as a complement to other supplier management and risk management areas too (which we’ll tackle in more detail in the next research brief in this series).

Because procurement is so often measured on cost savings as its primary KPI, another essential factor can be left by the wayside: risk. Especially when it comes to corporate social responsibility (CSR) and sustainability, risk remains hidden within indirect spend. To see how these dangers go unaddressed, here are three areas with examples of where organizations miss — but, with proper tools, can address — CSR and sustainability risks for indirect procurement.

At a headline level, I think most procurement folks are now familiar with the concept of tail spend: the low-value spend items that are non-core but still essential to the smooth operation of an organization. And of course, as the segment matures, even the tail itself comes under greater scrutiny or micro-segmentation with expressions such as tip of the tail, tail of the tail, mid-tail, tactical spends, spot buys, catalog buys, guided buying, “precision buying” (Simfoni’s own attempt to join the party!) and so on.

So what exactly are we talking about in terms of the items that fall under all these different expressions? In this article I’d like to offer a simple model that describes the types of spend that reside within the tail spend category, and propose the optimum technique for how best to address each one.

Last year, Coupa unveiled its vision for business spend management (BSM), and it added products throughout the year. One of those was a virtual credit card with international reach that’s from Barclaycard, a Coupa partner. We recently caught up with Barclaycard to get a look at the offering and find out more about the deal. In an interview, Barclaycard's Rob Tuckwell walked us through the partnership and talked about how the card works.
Spend Matters UK/Europe recently caught up with Barclaycard to get a look at the offering and find out more about the deal. In an interview, Barclaycard Rob Tuckwell walked us through the partnership and talked about how the card works.

Tuckwell, the director of partnerships & B2B at Barclaycard Commercial Payments, said the first thing to know is that this service shouldn’t be confused with P-cards, the physical cards used for procurement purchasing. He said Coupa is using virtual cards that generate a one-time credit card number that’s specific to the purchase order, not a person — allowing greater control and reconciliation benefits.

“This is a much more efficient way of dealing with high-volume, low-value, and one-off suppliers,” he said.

The list of corporate social responsibility (CSR) and sustainability risks in the physical supply chain is long. When securing direct materials, procurement organizations must assess factors from restricted or hazardous substances to the kind of labor that went into raw material extraction and even political restrictions like sanctions on whether companies from certain countries are even allowed to do business with you.
Because of these and numerous other potential issues, many companies have begun to focus on identifying and eliminating such risks from their supply chains with the help of third-party CSR data sources and risk-monitoring platforms. But while the value of assessing CSR risks for direct materials spend has gained prominence in recent years, the other side of the procurement coin, indirect spend, has not received nearly as much interest. That’s a shame — and a risk in itself.

Spend Matters has been exploring the state of artificial intelligence in procurement. Before we look into the future, let’s see where we’re at now. We started with AI in Procurement Today (Part 1 and Part 2), which was followed by AI in Procurement Tomorrow (Part 1, Part 2 and Part 3). This leads one to ask, what comes next? A number of vendors are already working on the tomorrow features and a few even have some in beta.

We aren't going to look too far into future because we want to stick to capabilities you should see in the next decade. So here’s a representative list of some of the more common features coming down the pipe. You should expect to see:

After Coupa bought Aquiire in October, procurement veteran Gary Hare said in a Spend Matters interview that the deal “surely sends a signal, but maybe not an obvious one.” Hare knows where Aquiire came from and possibly where this acquisition is taking Coupa. He knows because until 2009 he led Vinimaya before it morphed into Aquiire — back when the company got several of the patents that Coupa hopes will propel it forward. So read about the future of e-procurement in this Q&A, which will appear in two parts.